understanding eob terminology and searching vendor websites · understanding eob terminology and...
TRANSCRIPT
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Understanding EOB Terminology and Searching
Vendor Websites
Benefits Administration Training Team
Revised 2016
Basic Insurance Definitions
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This is the dollar amount typically considered payment-in-full by an insurance company and an associated network of healthcare providers. The Allowable Charge is typically a discounted rate rather than the actual charge.
Allowable Charge (Also referred to as the Allowed Amount, Approved Charge or Maximum Allowable)
Allowed Amount Example
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Scenario : The plan member visits the doctor for an earache. The total charge for the visit comes to $100.
If the doctor is an in-network provider, he or she is required to accept $80 (negotiated fee) as payment-in-full for the visit. This is the Allowable Charge. The remaining $20 is considered provider write-off, for which the plan member cannot be billed.
After the plan member pays the co-payment/or deductible/coinsurance, the health insurance plan will pay the remaining balance.
NOTE: If the doctor is an out-of-network provider then the plan member will be held responsible for the amount the health insurance company will not pay, up to the full charge of $100.
Doctor Visit for Earache
Cost of visit $100
Negotiated Fee
(Allowable Charge)
$80
Doctor Write Off $20
Basic Definitions - Continued
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Deductible
The amount the plan member owes for eligible healthcare services before the health insurance plan begins to pay.
Deductible Example
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Scenario: If the deductible is $1150, the plan won’t pay anything until the plan member has met the deductible for covered healthcare services.
NOTE: The deductible does not apply to all services.
Cost of Services $1350
Member Deductible Paid $1000
Amount covered for eligible healthcare services $350
Basic Definitions - Continued
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Co-insurance
The cost a member pays for a covered healthcare service. This cost is calculated as a percent of the allowed amount for the service (i.e. 80/20%). The member pays co-insurance plus any deductibles owed.
Co-insurance Example
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Scenario: If the allowed amount for an office visit is $100 and the plan member has met their deductible, the co-insurance payment of 20% would be $20. The health insurance plan pays the rest of the allowed amount.
Visit Allowed Amount $100
Member pays 20% after deductible is met $20
Health Insurance Plan pays 80% $80
Basic Definitions - Continued
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Participating Provider (Network Provider)
A provider who has a contract with the plan member’s health insurance carrier to provide services to the plan member at a discount.
Members should use participating (network) providers to receive maximum benefits under the plan.
Basic Definitions - Continued
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Non- Participating Provider (Non-Network Provider A provider who doesn’t have a contract with the health insurer or plan to provide services to the plan member.
The plan member will pay more to see a non-participating provider. A non-participating provider would be considered “out of network.”
Note: Although the plan allows reduced benefits for eligible care received from providers not participating in the network, the cost to the member could be substantial.
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Understanding Costs
Medical
Jane hasn’t reached her $1,500.00 deductible yet
Her plan doesn’t pay any of the costs.
Medical costs: $125.00
Jane pays: $125.00
Her plan pays: $0
Jane reached her $1,500.00 deductible, co-insurance begins
Jane has received multiple medical services and paid $1,500.00 in total. Her plan pays some of the costs for her next visit. Medical costs: $75.00 Jane pays: 20% of $75 = $15 Her plan pays: 80% of $75 = $60
Jane reaches her $3,900.00 out-of-pocket limit
Jane has received multiple medical services and paid $3,900.00 in total. Her plan pays the full cost of her covered healthcare services for the rest of the year. Medical costs: $200 Jane pays: $0 Her plan pays: $200
$3,900
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Looking at this sample EOB, the Allowed Amount is equal to the amount paid to the provider plus the Member’s copay.
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Another way to see the Allowed Amount would be to look at the claim.
Click here
Click the details
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The Allowed Amount is calculated by subtracting the Discount from the Amount Billed. It is equal to what the plan paid in this scenario.
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Click here to access claims
Click details to see claim information. Click customize my view to see more detailed information regarding claims.
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The Covered Amount equals the Allowed Amount in this example. The plan member would pay this amount plus any Amount Not Covered (if the plan member saw an out-of-network provider) towards the deductible for the CDHP.
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View or Hide Cost Details
This is a medication that would still be covered at 100%
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This is a name brand medication. The plan member would pay what the Total Rx Cost under CDHP until deductible is met.
This is a name brand medication. You would pay what the Total Rx Cost under CDHP until deductible is met.
This is a generic medication. The plan member would still pay the Total Rx Cost for this medication until deductible is met.